Is Facebook About to Crash Its Own Party?

Having attracted 900 million users to the biggest party in history, Facebook now has to sell them stuff -- without being a buzz kill.
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You're invited to a party. The host tells you all of your close friends are coming. You'll also meet his friends, and friends of their friends -- fascinating people, mostly extroverts, who have incredible stories to share about their work, their travels, the music that moves them and the books that make them rethink the world.

So you go to the party and begin to mingle. You flirt, trade anecdotes, and toast the other guests. You stumble upon two friends kissing, and you run into people you haven't seen since grade school.

And then Joe Biden appears on the top of the stairway as a surprise guest and the host announces the party is actually a -- what???!! -- fundraiser. Biden kicks off a slideshow -- there are photos of Biden with Mrs. Biden, Biden holding a child, Biden giving a speech -- and he asks you to donate to the Obama campaign. He suggests you ask your friends to do the same.

You sneak onto the patio for some fresh air, only to find it jammed with stalls of vendors passing out fliers. WalMart, McDonald's, Ben and Jerry's, Coca-Cola. Representatives stop you to ask you to comment on their new product, or watch a video about the people who manage their restaurants. You learn the host has blabbed about your psoriasis, and a dermatologist corners you to discuss a discount on skin treatments.

These guests aren't really here to socialize, you realize with dread. They're here to sell.


This is precisely the delicate "bait and switch" that Facebook is challenged with executing. Having attracted 900 million users to the biggest party in history,
-- without being a buzz kill.

The stakes are high: Bounce the merchants, and the company will fail, disappointing its investors, falling short of its profit promises, and putting its future in peril. Transform the cocktail party into a mall, and risk alienating millions of users who have no tolerance for an infomercial network. Post IPO, there's more pressure than ever to pony up profits.

Facebook, like so many other startups, put faith in the belief that if the users came, so, eventually, would the money. It earned $3.7 billion last year, hardly small change, and is now carefully experimenting with ways to infuse its site with more ads (see: "Sponsored Stories," which places companies' status updates side-by-side friends' updates in the News Feed) and shopping opportunities (Facebook's "Highlight" tool lets users pay to promote their posts, and the executives said they're interested in selling music and movies on the site).

Facebook's greatest asset -- us -- is also its Achilles' heel. We're a fickle bunch, and what attracted us to Facebook in the first place wasn't ads, or companies disguised as friends. It was each other.

Facebook sucked us in because it felt like such a personal place next to anonymous, one-size-fits-all web pages we encountered elsewhere. But there's no assurance Facebook can keep it that way. We didn't think "briends," brands masquerading as friends, were part of our social contract with Facebook, but slowly Facebook has allowed that kind of corporate intimacy to be part of the experience. This dissonance may be a problem for Facebook. We came for the people at the party. Will we stay for a brief word from its sponsor? How much will we be willing to hear from these "briends," and when, if ever, will we take our time elsewhere? (Perhaps we'll just hop to another, newer social network that hasn't yet put its mind to profits.) Will we choose to shop where we socialize, even though our parents taught us money doesn't mix with polite conversation?

In the years ahead, shareholders and advertisers will have the loudest voices in pushing for more marketing and selling on the social network. There's no way users can match their volume, so the question will be how closely Facebook can, and will, listen to what we want.

This tension between people and products underscores yet another challenge that uniquely afflicts Facebook given its social nature: Its users are horrible at handling change. When Apple updates the iPhone, it tweaks a tool and makes our lives a little easier. When Facebook introduces a new feature, there's the sense that Mark Zuckerberg has stormed into someone's dinner party, changed the music, dumped over a few cups of beer, and brought a few strangers into the mix. It feels like our personal space has been invaded. Who ever heard of someone threatening to ditch all Apple products over an iOS update? For Facebook, revolt (even if no one actually goes anywhere) is routine.

Google is also different. It never promised all of these emotional experiences. It has been there to provide a service, not social gratification. We tolerate the advertisements because we are getting something from Google: the luxury of powerful, free searches that make us more productive, educated and in the know. We go looking for information, and Google delivers information, in the form of blue links and ads. On Facebook, we go looking for relationships.

Several ex-users have penned manifestos outlining why they've decided to quit Facebook, and all include a similar refrain: It's my data and I don't want you delivering it to your advertisers. I don't trust you, I don't like how much you know about me, and I want out.

These privacy issues merit concern. Facebook has been "stingy" with giving brands data about users, analysts say, but it seems likely that the company will dole out more data as time goes on.

But there's also the atmosphere to worry about. Facebook closely monitors how users respond to the ads and marketing it serves up. But what if our clicks, minute to minute and hour to hour, fail to communicate to Facebook our general impression, which is that the party has become polluted? We always knew our friends were often "selling" us on particularly glamorous versions of their lives and whereabouts. Being pitched by a company is something else entirely.

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